imports

Right now the US imports about 70% of its oil. 30 years ago, we only imported 28%. What happened?

Well our economy boomed, we created a huge demand for more oil and we had to find other sources. But that’s not the only reason. The government of the US hasn’t been the most helpful ally in this battle for resources. ANWR is the perfect example of what not to do politically. The Clinton era narrative of “it will take 10 years before we have anything” rings hollow right now some almost 20 years later. Obviously had we done what was necessary then, we’d be reaping the benefit now.

But that graphic is stunning, don’t you think? In a partnership with Canada (the country from which we import the most oil and it is a extraordinarily secure source), who now provides about 20% of our total consumption (US + Canada = ~ 58% of our annual total), we could be 92% self-sufficient in 20 years. What that would mean is we could get that other 8%, for instance, from Mexico (now providing about 10% of the total). Or not. We’d no longer be held hostage by an oil cartel and unfriendly or unstable countries.

Right now 30% of our imports come from Saudi Arabia (2), Venezuela (4), Nigeria (5), Iraq (6), and Algeria (8). We could eliminate every one of them as a supplier. Every. One.

Of course that means doing something politically now. But that doesn’t seem to register with this administration. And that seems funny given the obvious screaming need for them to be seen creating jobs and driving the unemployment rate down.

Total offshore-related oil and gas employment could hit 430,000 in 2013 if the permit slowdown is reversed, including about 187,000 new jobs.

New policies could result in a 71 percent increase in oil and natural gas spending in the Gulf to $41.4 billion.

Texas (will reach 149,000 jobs) and Louisiana (129,000) would gain the most from a return to normalcy in the Gulf, but the jobs impact would touch a number of non-Gulf states as well – including California, Pennsylvania, Ohio and Michigan, Quest says.

Tax revenues would accrue to all levels of government "if the government pursues a balanced regulatory approach that allows for the timely development of the backlog of (Gulf) projects in an environmentally responsible manner." Said API President and CEO Jack Gerard: "We need to create taxpayers, and that’s what this would be doing."

Result? A 20 year program that would result in jobs, revenue and energy resources.

By granting comprehensive access to U.S. oil and gas reserves, $4 Trillion in state and federal revenue could be generated to fill American treasuries and eliminate nearly 30 percent of the national debt.

That growth would spur new jobs – lots of new jobs:

530,000 jobs could be created with increased access to U.S. oil and gas resources. To put that in perspective, that would provide enough jobs to employ 85 percent of Vermont’s entire population. By 2015, development of the Marcellus Shalealone could create 160,000 jobs in Pennsylvania, 20,000 jobs in New York and 30,000 jobs in West Virginia. Add that to the 9.2 million Americans currently employed by the oil industry and you’ve got the economic engine powering our economy and our way of life.

That is how you turn an economy around. That is how you increase revenues to government. That is how a smart government would approach the current problem (and in more areas than just gas and oil).

Instead we have the “permatorium”. If you’re wondering why this isn’t happening, you need to ask the administration:

"The slow pace of Gulf development since the accident has cost jobs, revenue and energy production," said API President and CEO Jack Gerard. "The study shows what could be accomplished on jobs if project approvals and permits could get back to a normal pace. We’ve done the necessary work raising the bar on safety. We cannot continue to delay developing energy and hiring people in the Gulf. The disappointing unemployment numbers from the government last week make this more important than ever," Gerard added.

The “accident” of course is the spill in the Gulf. And Gerard is right. This slow down, after the industry has “raised the bar on safety” is inexcusable. Especially in this unemployment climate. Especially in this economic climate. Especially with tax revenues down. And especially with energy insecurity so prevalent.

9.2% unemployment, a slowing economy, a revenue starved government, a country suffering from energy insecurity and a huge part of the answer sitting right there in front of them – and they refuse to act.

Green groups want less forestry in the developing world. Industry wants green protectionism to cut the volume of competitive imports. Unions want green protectionism to stop imports to ensure they can keep workers in high-paying jobs.

So using the environment as an excuse, we have these three groups colluding to further their own agendas. Call it “green protectionism”.

In a recent case it has been to keep toilet paper made in foreign countries out of Australia.

That’s right, toilet paper.

Can anyone now figure, based on that formula, what the missing part of the equation might be? The part that is necessary to make such collusion pay off?

Yes, government. Certainly green groups can want less forestry in the developing world, and industry can wish for a way to cut the volume of competitive imports. And unions always hope to ensure high paying jobs.

But only one entity can actually make all those wishes, wants and hopes come true. If government becomes involved it has the power to fulfill the wishes and hopes of these three disparate special interest groups.

That’s what happened in 2008 when two Australian toilet paper manufacturers, Kimberly Clark Australia and SCA Hygiene as well as the Construction Forestry, Mining and Energy Union (CFMEU) and the World Wildlife Fund essentially colluded to keep foreign manufactured toilet paper, primarily from Indonesia and China out of the country. Their ostensible complaint was those countries were “dumping” their product in Australia.

For a short time they succeeded in getting imports restricted by the Australian Customs Service, until, it seems, the ACS did a study to determine the validity of the complaint. Their findings were significant. The Australian Customs Service report calculated that the potential downward pressure of imports could be as high as 42 percent of the price.

In other words, the collusion would cost consumers in Australia 42% more because the competitive pressure that kept prices low would have been removed. In addition, a recent report commissioned by the Australian government found that “illegally logged material” – one of the prime reasons these groups claimed Australia should ban imports of foreign wood products – only comprised 0.32 percent of the materials coming into Australia. In other words, the threat was insignificant.

That’s Australia, but what about here? Well, we’re hearing the same sorts of rumblings concerning “green protectionism”.

Sadly these campaigns appear to be part of a spreading green protectionist disease, where industry, unions and green groups work together. In the United States the disease was brought to life by the Lacey Act, which imposes extra regulation on imported wood and wood products to certify their origin and make them less competitive.

The Lacey Act is actually an update of a 1900 law that banned the import of illegally caught wildlife. It now includes wood products (2008). And that means, since extra steps and cost are incurred by foreign manufacturers, that consumers are stuck with the increased cost.

While the reasons for protectionism may sound good on the surface – save the forests, higher wages, less competition to ensure jobs – it isn’t a good thing. If freedom is defined by the variety of choices, what protectionism does is limit those choices and impose an unofficial tax on consumers. They end up paying the cost of collusive action between government and special interests.

So, each time your government announces that it is doing you the favor of limiting the imports of this commodity or that, based on “green” concerns, hold on to your wallet. Whatever the government is protecting you from, you can rest assured that the price of the domestic variety is headed up, since the other product of government intrusion is limiting competition. Rule of thumb: restricting free trade is rarely a good thing. And the only entity that can do so is government. “Green” is just the newest color in an old and costly game – protectionism.